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Why Google is looking to purchase YouTube

1) Google has deep pockets and wants to control the legal battle YouTube will be unmatched for. YouTube will eventually be embroiled in an industry defining copyright battle like Napster was. Much of the content found on YouTube is commercial content owned by the large TV networks, or is user-generated content using copyrighted songs without the consent of the owners. So why would Google possibly want to get involved in this copyright mess and risk their $10 billion in cash reserves? Google has significant interest in this battle, as it will set a legal precedent and have significant effects on their future plans.

2) Google''s future plans revolve around their dark fiber buying spree, which experts suspect is for building the world"s largest video server network. What does that mean? Dave Burstein, who writes the DSL Prime newsletter, says, [The] key idea is that Google intends to become the most important video carrier on the planet, and is developing the servers and fiber network to make that possible. As television shifts to the net, only Yahoo and perhaps British Telecom are in position to compete. The ABC"s and NBC"s of the world are outclassed.

3) YouTube is profitable, that"s not a fact, but ran the math and it"s hard to dispute. We"ve known YouTube"s bandwidth bills were $1 million/month roughly 6-months ago, but they"ve never publicly commented on their revenues and whether they"re profitable or not. I suspect they are, but just haven"t brought light to that fact because then the TV networks (copyright holders) would likely start knocking down the doors with their lawyers.

4) YouTube is #1. They are the website people go to for watching online videos. Google wants that traffic (eyeballs) for their future plans, because Google Video hasn"t been able to unseat YouTube and likely never will.

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